Weebit Nano Limited (WBT) Earnings Call Transcript & Summary

My name is David Perlmutter, and I have the privilege of being the Chair of Weebit Nano. It is my pleasure to welcome you to the 2022 Annual General Meeting of Weebit Nano Limited. We have a quorum. I declare the meeting and poll open. Notice of Meeting was distributed on 14 October 2022 and which will set out the business and resolutions to be considered at this meeting and will take the notice of meeting as read. It is now 10 a.m., but 10:05 would be precise, the time appointed for the meeting. And as we have a quorum, I declare the meeting of that. I would like to outline some of the procedural matters. Today's meeting is the first time we have been able to get together in person since 2019, last time we had it in Melbourne. And it is great to be able to meet in person time again and see some of the faces which we know. It's good to see same faces and new faces as well. We are also conducting the meeting with a virtual component. This hybrid format allows shareholders and proxies wherever they are -- they maybe to attract mutuality also all shareholders and proxies have been ability to ask questions and enroll today. If we experience any technical issues during the meeting, short recess may be required. Should this occur, we will communicate accordingly. Shareholders will have an opportunity to ask general questions after the conclusion of the formal items of business and following presentation from CEO, Coby Hanoch. For those attending virtually, please see the steps as outlined on the screen. For those the meeting in person, please raise your hand when prompted and you will be a call to -- on the operator. Voting today will be conducted by a way of all items of business. Instructions on how to vote through the upper ratio buttons are displayed on screen. This item -- in order to provide everyone with an opportunity to vote and in case anyone cannot stay for a whole meeting, the poll is now open, and you can vote on all resolutions. I will give you the warning before I move to close voting. For those voting holders physically in the room with me today, we should have received a voting card upon registration. This complete inverse of the voting card should you require assistance to do this -- have computer share staff available to assist you. Today, I'm joined by fellow directors, CEO, Coby Hanoch. I don't know a few of us on the line. As you know it's mid of the night in Israel. Atiq Raza, which I presume is on the other side of globe. We have here Fred Bart and Ashley Krongold, local Australian directors of the company. Also, hopefully, present today is CFO, Ms. Alla Felder. She might be asleep, but she is never sleep. Representatives from our company's Secretary Office, claim Australia. We have [indiscernible]. I apologize for mispronouncing the name. Our auditor from [indiscernible] and [ Glenn Rogers ] our share registry, Computer share Investor Services, who will also act upon our returning office. I would like to make a short statement at the chair. The 2022 financial year and the last couple of months have been an exceptional period for Weebit Nano, a period of which we demonstrated the maturity and suitability of our embedded ramp of volume production entered our first commercial agreement with SkyWater Technologies, successfully qualified our technology with CEA-Leti and received our first silicon wafers incorporating our ReRam module from SkyWater Technologies U.S. production. These achievements have accelerated our guide with Tier-1 and Tier-2 fabs and potential customers, and we are now in various stages of discussions and technology evaluation with each of them. Many of you will have heard Coby refer to this dynamic as a chicken and egg scenario, we're trying to get the chicken and the egg altogether. It walks better when you get one for the other, but we'll see. We'll often wait until customers new technology before adopting it, while a customer will also want to know new technologies available at the fab before integrating into their designs. We are now at a point where we will soon break this deadlock as the market acknowledges the need for ReRam and we are getting customers and fabs to talk with the goal of a 3-way operation. We are hearing from Tier-1 and Tier-2 fabs and that customers are asking than about ReRAM. And this also acknowledged by customers. We are now qualifying the chips manufactured at SkyWater. And SkyWater is already calling on their customers to introduce ReRam and you could see the SkyWater website, mention the potential of it. Our progress over the last year would not have been possible without our valuable partnership, which developed a partner, CEA-Leti, and first commercial partner, SkyWater Technology, on behalf of this entire web team, I would like to thank you both, and I look forward to our continued collaboration in 2023 and beyond. I'm incredibly proud of Weebit Nano achievements to date. The company has consistently delivered against its milestones and our MBDA ReRAM is well placed to meet the rapidly growing demand and faster -- more efficient than volatile memory equipment. The achievement of several technical monsoon over the past year is a testament of our exceptional team, management and the Board. While the memory technology we are commercializing is new, developing in new semiconductor technology to market is a process many of the Weebit Nano team have been through before. Thanks for you to my fellow directors and Weebit's entire team for all the hard work and dedication over the past year, move forward for the year ahead. And finally, thank you, our loyal shareholders, for supporting us on this journey. This is not taken for granted. And full year 2023 is shaping up to be an exciting year. One of which we expect to sign an additional fab in customers and also commence volume production and our embedded ReRAM technology. And Coby will bring more details in the session. So I turn back to formality now out of today's meeting. I confirm that I propose to vote those proxies left to my discussion as the chair in favor of all resolutions. Proxy voting received prior to the meeting will be shown on the screen for each item of the business to be voted today. There's a resolution mark. Okay. Before we go there, we talk about the questions. Our shareholders' validity appointed proxies and corporate representatives are intended to ask questions at today's meeting. It is my duty as Chair to ensure the shareholders here as a group have a reasonable opportunity to discuss the management of the company and the items of business before the meeting. The following procedures have been adopted to the meeting. Questions and comments should be concise. Questions and comments must be confined to the particular item being discussed into the matters relevant to shareholders. The shareholders are limited to one question at the time. As outlined previously, for those attending virtually, please see the steps as outlined on the screen. I showed it earlier for those attending the meeting in person, please raise your hand when prompt and you will be called on for pay time. The first end of the business is to receive and consider the company's annual report, including the directors' old and auditors report for the year ended 30th of June 2022, a copy of the 2022 annual report was made available to shareholders on 26th of August 2022. There is no formal resolution to put to the meeting in relation to the adoption of the 2022 annual report. However, I will respond to questions from shareholders in relation to the annual report. Miranda of [indiscernible] is also available online to respond to any questions lending to the audit and financial segments. We'll also take questions a bell or any comments you may have in relation to the management of the company. Are there any questions or comments related to the -- on the phone online? Any Questions on the phone? Okay -- okay -- so if there are no questions online and on the phone, and there are no questions in the room. I will now move to the next item of the business. Resolution 1 relates to adoption of the remuneration report for the year ended 30th of June 2022, and set out in the notice of meeting and displayed on the spin. Are there any questions or comments online on the phone?

Any questions online?

There are no questions on the phone.

Any questions in the room? There are no further questions in the room. I'll now table the outcome of the proxy voting received prior to the meeting as shown on the screen. Resolution 2 relates to the reelection of Mr. Yoav Nissan-Cohen, as a director of the company is set out in the notice of meeting and displayed on the screen. Are there any questions online or on the phone?

No questions online.

There are no questions on the phone.

Any questions in the room? As there are no questions online, on the phone -- sorry, I will now move to the outcome of this resolution. Resolution 3 relates to the reelection of Mr. Atiq Raza, as the Director of the company, as set out in the notice of meeting and displayed on the screen. Are there any questions online or on the phone?

No questions online.

Any questions in the room? As there are no questions in the room, I will now table the outcome of the voting received prior to the meeting as shown on the screen. Resolution 4 relates to the approval of issue of performance rights to Executive Director of the company, Mr. Jacob Hanoch is set out in the notice of meeting and displayed on the screen. Are there any questions on the phone or online?

No questions online.

There are no questions on the phone.

Any question in the room? As there are no questions in the room, I will now table the outcome of proxy voting received prior to the meeting as shown on the screen. As the next item relates to me, I will hand the chair over to Coby to address this resolution.

Thank you, Dadi. Resolution 5 relates of issue performance rights to Non-Executive Director of the company, Mr. David Perlmutter as set out in the notice of the meeting and displayed on the screen. Are there any questions or comments online or on the phone?

No questions online.

There are no questions on the phone.

No questions here. If there are no questions online or on the phone, and there -- sorry, as there are no questions in the room, I will now table the outcome of proxy voting received prior to the meeting shown on the screen, -- sorry, yes. Sorry. No, we did that one. Okay. Okay. I will now hand back to Dadi to chair the meeting.

Thank you, Coby. Resolution #6 is the approval of issue of performance rights to Executive Director of the company, Dr. Yoav Nissan-Cohen, set out in the Notice of Meeting and displayed on the screen. Are there any questions, comments on line or on the phone.

No questions online.

There are no questions on the phone.

Are there any questions here in the room? As there are no questions in the room, I will now be able to show the outcome of the proxy voting, received prior to the meeting shown on the screen. Resolution 7 relates to the approval of issue of performance rights to Non-Executive Director of the company, Mr. Ashley Krongold, as set out in the notice of the meeting and displayed on the screen. Are there any questions or comments online or on the phone.

No questions online.

There are no questions on the phone.

Any questions in the room. As there are no questions in the room, I will now show the table of the outcome of the proxy voting received prior to the meeting as shown on the screen. Resolution 8 relates to the approval of issue of performance rights to an Non-Executive Director of the company, Mr. Fred Bart is set out in the notice of meeting and displayed on the screen. Are there any questions or comments online or on the phone.

No questions online.

There are no questions on the phone.

Any questions in the room? As there are no questions in the room, I will now reveal the outcome of the proxy voting received prior to the meeting as shown on the screen. Resolution 9 relates to the approval of issue of performance rights of Non-Executive Director of the company, Mr. Atiq Raza set out in the notice of the meeting and displayed on the screen. Are there any questions online or on the phone?

No questions online.

There are no questions on the phone.

Are there any questions in the room? As there are no questions in the room, I will now table the outcome of the proxy voting received prior to the meeting as shown on the screen. Resolution 10 relates to the amendments to the constitution as set out in the notice of the meeting and displayed on the screen. Are there any questions online or on the phone?

No questions online.

There are no questions on the phone.

Are there any questions in the room? As there's no questions in the room, I will now show the table outcome of proxy voting received prior to the meeting is shown on the screen. Thank you very much. I'll now pass the control of the slides to Coby. So he's going to give the CEO others, and there's going to be the questions and answers after we finish his presentation. Go ahead.

Okay. I guess you guys survived the previous part. So I'm really, really glad to see everyone here. It's so good, almost 3 years that I haven't been to Australia, and it's really great to be here, and I appreciate all of you coming. I think this has been an amazing year for us. There have been so many things that happened. And it's really, I think, first of all, you see the title on this slide, the next MVM is here, I think that's really the key message right now, even a year ago or 1.5 years ago, I would talk to people in the industry, I would talk to foundries, I would talk to customers, "Oh, yes, that's a very interesting technology. It sounds great. It's that future technology" and even we put tagline was the future memory. I'm very glad to say that we're changing it, you can see because it is here. I was looking at it. Everyone is telling us, wow, we need it now and our tagline is just not the right one. So we changed it and that's really the key message. We're talking to people. We're talking about the foundries. We're talking to customers and everyone is just saying, yes, now is the time we need it. So -- first of all, I guess we already introduced the Board here. I'm always -- I always tell people how proud I am of the Board. And that's -- I think it's obvious that you guys know we -- you guys know we did -- I won't spend too much time here. We're working on the nonvolatile memory technology and this market is growing rapidly. The demand is very strong. I think you guys are aware of that. Again, the management team I wake up every morning, I can't believe all these guys are working with me. It's just so awesome to have people -- each one of them has 25, 30 years of experience in the memory domain, it's so much experience and so much knowledge that no matter what obstacles we need. And obviously, you always need obstacles in this domain, but they know how to make it work. They know how to continue, and I'm really very, very proud of this team. So a little bit of an update on what's happening today. Many of you have already heard many times, there's a chip shortage. There's really an over demand for chips, the semiconductor space is really under a lot of pressure because the demand is growing all the time. And it is -- you guys know in previous presentations, I used to have this slide that shows that today, 9 hours to 10 -- of the top market cap companies in the world or semiconductor companies are very heavily dependent on semiconductors. That's what's happening. No matter where you look, no matter what you touch, it has semiconductors in it. And in those semiconductors, the top market segment is memory. So I put your just some of the investments that are going on this year in semiconductors. Everyone's talking always about the U.S. chipset, but they don't realize. Europe has been putting money, Japan, Korea, Taiwan, a lot of countries have been putting a lot of money into building their semiconductor infrastructure. Semiconductors are strategic. They're strategic companies, 2 countries -- and you can see the geopolitical tensions now even in U.S. and China, the major element there is semiconductors. When people talk about the fear of China invading Taiwan, I think the #1 fear that they have is China taking over TSMC, which is the biggest issue, TSMC, UMC, et cetera. So you can also see the investments that companies are making. I told you guys many times, building a fab is billions of dollars. The bigger fabs, the more advanced fabs, I've seen a fab that was just one building, USD 30 billion, $1 billion -- it's a building, yes. It's a building, but it's just mind-boggling to think of the complexity of making these semiconductors there and the investment that goes into these things. And you can see the numbers here. It's crazy. All of these companies are announcing these huge investments. Some of them, Samsung said it's going to be over a few years, whatever. But I mean, these are numbers that are just so hard to even understand. And again, the large segment in semiconductors is memory and nonvolatile memory is a key part of that. So when you look at specifically nonvolatile and specifically at the emerging, so when people say emerging nonvolatile memory, we're talking about 3 ReRAM and MRAM. And Joel is one of the leading analysts in this domain. This is their recent report showing the growth that they see for emerging nonvolatile memory market. They actually expect it to reach USD 3 billion in 2027, they're currently predicting that ReRAM will be 1/3 of it. So MRAM, by the way, has been in the market already several years. It's leading ahead of ReRAM. So there are companies that are already selling it commercially. It's already out there and that's why it has a larger market share. I personally think that they're going to be updating those numbers, especially moving forward from the discussions that I've had with multiple fabs with multiple customers. People are shying away from the MRAM. MRAM is a much, much more complex technology to manufacture. I heard people say, "Oh, you just look at the list of areas and materials that they have in there. " We talked about nonstandard. That's like the most extremely nonstandard materials you can have in a fab. You cannot -- when I talk about Weebit and the fact that we're standard materials, we just go into the standard production line of a fab and we just go, I mean we need to do the technology transfer. We need to make everything work, it's a qualification and all. But in general, it's straight forward. With MRAM, you need to have a separate manufacturing facility. You have to have it far away from the fab because the damage it can do to the fab is huge -- manufacturing it, you have so many thin layers that you need to manufacture the added cost to a wafer of MRAM is between 30% and 40%. ReRAM, our ReRAM is about 5% to 7% added cost to give you that feel. So I believe that as we ramp up there, as we get to the market, as we start having more and more customers and people feel more comfortable with our ReRAM, the 33% personally, I think, is going to change. Now I already talked about this, but my team put together the logos when I told them, we need to change it. We're not the future memory. They actually said, "Look at how Weebit progressed. ReRAM research started back in the '60s. Weebit started, the company actually incorporated in 2015 at the time where we're just talking about jumping to the future. And you look at our tagline, the emerging memory or the future memory, we were always something futuristic. Again, I'm really glad to say the next memory -- the next MVM is here. We're qualified, and this is really a great moment for us that we're transitioning into the commercial side of it. I think many of you saw this slide, but it's a very important slide to look at, again, all of the advantages that our ReRAM brings to the market. And I start from the lesser advantages saying there's 100 times faster than flash. That is very significant, AI, autonomous vehicles, et cetera. Just think of the sensor in an autonomous vehicle that needs to react as quickly as possible to something that happens and do something. You need to have extremely fast systems we are 100 times lower power than flash. Again, we consume 1% of the power relative to flash, think of your cell phones, how often do you need to stop in the middle of the day. Does anyone have a charger? Yes. So you want lower power memories, you want lower power everything, right? Radiation tolerance where basically inherent tolerant radiation. Many industries, defense or aerospace or many others, even when you're in hospitals and you have all kinds of radiation from all kinds of places, you don't want to have the memory impacted by high temperature for automotive. This is a critical criteria, and we've been receiving so many requests about this because many memories cannot achieve high temperatures. But I think the 2 most important advantages that we have, and we've said that many times, one is we can go down to below 40 nanometers. This industry is constantly about shrinking and going down to smaller and smaller and smaller geometries. And today, the advanced designs are already at 5-nanometer, we have Samsung announced that they're going to be opening a fab at 1.4 nanometer. TSMC announced that they're going to have 1 nanometer. I don't know how they're going to do it, but besides the point -- 40 nanometers is an old technology rate. So all of these advanced guys today, when they need nonvolatile memory, they have an external flash that they kind of blue and connect somehow to it very inefficient, power hungry slow, all the bad things you want to talk about and especially security, people can ease drop on what's happening between the 2 chips, and that's not a good thing. And the #1 thing I already talked about, the cost effectiveness where a back-end-of-line technology, I won't go into technology, but that really has an impact. It makes much simpler, relatively, Dadi, always tells you, you need to emphasize it nothing is simple in semiconductors, but it is simpler, it is easier, it is cheaper to manufacture. There's a lot of intelligence in our ReRAM . You guys know how many years it took us to develop the technology, how many patents we have, et cetera, et cetera. But sometimes doing things in a very simple way is the hardest thing, right? And that's basically it. Manufacturing is actually simple. It's knowing how -- what to put where, which really is the smart, and that's really what we focused on. But overall, I think that this is really important. And you look at the different market segments here, each one has different demands. But when you look at all of these advantages that we have, we give key advantages to every one of these market segments and we can go and address them. And we are talking today to different market segments. The key ones that are talking to us right now are IoT and the analog guys -- the power management guys. Those are sweet spots for what we're doing with SkyWater. But out of the others, now that we're working on 22 nanometers and beyond, there's interest from many different domains already. So again, this past year has been just awesome, very exciting. And I know that in the beginning of the year, people were complaining, but you don't have any news, and I say, yes, we're working on it. And some of you guys, I think, also sent me messages on LinkedIn or e-mail or whatever, what's going on? When are you going to have some news. Well, a year ago, look at all the stuff that happened. A year ago, we announced we already reached 28 nanometers and we had a very nice raise last year. We moved into this year, we announced we're scaling to 22. And we said before the end of the year, there's going to be a tape-out of 22 FD-SOI. So again, just so you understand, the number of fabs worldwide that can manufacture 22 nanometers is less than 10. Dadi and I, we're trying to arguing if it's 7 or 10 or how many, but it's that order of magnitude. There aren't many fabs that can go there. I can tell you that the foundries that we're talking to now are pushing us to the teams already and we're already looking at manufacturing in the teams and really pushing forward all the time. We announced the selector, I'll talk about that later. The qualification, a key point. I'll talk more about what we're doing on the qualification side. And of course, I actually have here coming out of the office to the plane, I grabbed the wafer. We just got the wafers from SkyWater. I have a wafer here to show you guys, whoever wants to after we finish the talk -- I have the wafer. I also have one of the chips that you can look at under the magnifying glass to kind of get a feel for what we're talking about. So it's here. So really, SkyWater was a major milestone for us, having the first fab that actually signed a licensing agreement, we have a commercial agreement with them and you've been following things with us. We had the agreement with them. We transferred the technology, the first technology transfer. The first everything is always the more challenging one. I told you guys in the past, we prefer to work with a Tier-2 fab in the beginning because they're much more tolerant, we can work with them. It's more a high level. They've been a great partner of moving forward. We taped out our memory chip there, and we got the wafers and now we've already started qualifications. I can tell you I got a nice e-mail when I landed here that, hey, the chip is working, and we're seeing good initial results. Obviously, it's very initial, but the qualification process is a long one and we're heading into that. And at the end of that, next year, we'll be ready for mass production with customers at SkyWater. So I'm very proud to hold that wafer in my hands in the picture there. Now SkyWater is now already, we've moved to the next level. You go to the SkyWater website, you can see a page about Weebit, Weebit's technology. So they're promoting it. Their sales team has received training and they're talking to customers. We're getting questions from their customers about ReRAM, so that whole interaction is going -- their CEO, by the way, in their earnings report, I guess, a couple of weeks ago, was talking about Weebit. So it's really moving forward to that next step. It's always -- it's a long process moving to commercialization, but it's happening. And that's really good -- the thing that happened, and I guess I'll talk about the qualification first. We -- the other major, very, very major milestone that we hit recently is the qualification. And for people who are not from the industry, it's hard to understand just how important this milestone is. But this is really a stamp of approval from an industry standards body, they define getic, which is a very important industry standards body, define what kind of testing needs to be done in order for a technology to be able to say that it's ready for mass production. And you need to present your results to people and so on. And it's a very, very difficult and rigorous process. You need to go through multiple manufacturing cycles. It's not enough to have one good manufacturing cycle. You need to have at least 3. You need to take hundreds of chips from the different wafers in the different manufacturing cycles. And goes from testing, in our case, it was almost 700 chips that went through very intensive testing. It's going through high temperature, chips are put in the oven for thousands of hours and you need to make sure that they still operate after that. And you go through all -- I won't go through all the details. But it -- that's why it takes so many months of work, hundreds of chips going through all of this and different manufacturing cycles. But at the end, we have now qualification, we're showing it to the big foundries and it's opening all the doors. Now what's really happened, and this is a good time to try to explain to you some of the different things that are happening in parallel in this industry. So I said a year ago, everyone was still saying it's that future memories. But now TSMC, the largest fab in the world, announced that they have ReRam and that they're offering it to their customers. That sent the shock wave in the industry. By the way, we found out now that there's already a chip in the iPhone 14 with embedded ReRam in it that was made in TSMC. So you can imagine all the other foundries, suddenly wake up, oh my god, we need to compete with that. We need to -- what are we going to do here and they're looking around for ReRAM technology. And that's where another angle comes in, a few years ago, I remember having meetings in forms like this and people were saying, well, what about the competition? And at the time, there were 4 young companies like Weebit developing ReRAM. Well, guess what the other 3 are basically not there. One of them was trying to jump really high and say we want to have the ultimate ReRAM. So they were using nonstandard materials, and they had huge challenges with the foundries, eventually after raising USD 150 million there, their investors got tired and some Chinese took over and there's some small activity happening in China, but basically, it's been more than a year that we haven't heard anything from. Another one was acquired and the company that acquired them was acquired, and the company that acquired didn't have interest in memory. They wanted other technologies there. They let go most of the team. Basically, that is falling apart. And so basically, these companies are not there. And now when people are looking for it, oh, there's a company here that has qualified ReRAM that already has wafers that came out of a mass production facility. It's working. They have a management team that we know. We know a lot of the people in the Board, the management team. We know these guys are respectable. So all of a sudden, sorry, we have Tier 1-fabs falling up on us, we're talking now to quite a few of the Tier-1 fabs. And there's interest, and we're in different stages of evaluation with these guys. So there's really so much happening. Now I can't go into the details, and I can't tell you guys who we're talking to and what -- as soon as we have something concrete, of course, you guys will know. But there's really so much happening and it's so exciting. So that's really what I'm trying to pass the message to you guys, Weebit has gone a long way. And by the way, a lot of you guys have been with us through very tough times. And I think -- it's so great to be now in a position where we really have good news happening -- a lot of things going on. And we've been talking a lot about the embedded, which is really the first market that we're going to. It -- a lot depends on strategy and on decision of what you want to do first. By the way, I was talking about the other 3. I think a lot of their issues were that they were trying to jump too high, too far, too fast and not really going in an organized methodic way about the technology. We identified -- the embedded space is where we have very big advantages over flash going down below 40 nanometers, there's not even any flash solution. So we're going into the embedded space first, and we will be announcing -- I hope very much that we'll be closing deals with additional foundries and definitely with customers. There's already a lot of discussions with customers. In the past, I was talking about this triangle, Weebit providing a technology. This technology needs to be embedded into a system on a chip of a product company and then they need to go to manufacture in a fab or a foundry is what we call a company that has fabs. I use that interchangeably. And I hope I'm not confusing you. So we're building these triangles now. We're already connecting customers and foundries and having these discussions. So we're going to start having more and more of these triangles that we'll be able to announce as soon as these things really materialize, but we're making very good progress in that. But that's all embedded. In parallel, there's a huge market that is the discrete or the stand-alone market. And that market of stand-alone chips is something that we're not neglecting, there is constant work going on there. You guys know that we've been working on the selector. We've been making good progress with the selector. We've managed to make it such that it's really also focused on standard materials and something that we can go into the fab without many issues, and that's a huge challenge. So this thing is happening. And the discrete market, by the way, is also -- has a lot of segments in it. Some of them are going to be much harder for us to penetrate and it's going to take longer time. Some of them are going to be easier to penetrate, it's called North Flash is actually a market that is easier to go to. So we're already talking to some customers about North Flash and having discrete chips there. So again, so many things going on in parallel. And as we get things done, you guys will know the details. Scaling down to 22 is another important thing. I already mentioned, there are very few facilities that go to 22 and even figure that can go down to 16, 12, 10 and beyond. We're going to be taking out soon on 22 nanometers, that's another important milestone to show the industry that we're not just with a good technology. We can go into the leading edge. We can scale down to the smaller geometries and get there. And I can tell you that some of the Tier-1 fabs are already pushing us much beyond 22 and there's already work going on about looking at how we can work at smaller geometries. So there's constantly -- this thing -- people ask me, when are you going to finish your R&D work, never. You never finish your R&D work because you constantly want to go to the smaller geometries as they appear and as the market evolves, you constantly want to improve to be even lower power, to be even faster, to be even simpler, easier to manufacture have better endurance, better retention. So there's constant work going on. But this is -- when we have this, it's going to be another key milestone to show that we actually managed to have a design 22 that we're sending to manufacture. So the bottom line is, there's a lot of activities going on. We're talking to these Tier-1 fabs -- we're working with a lot of customers. Some of the people that we're talking to, even people who don't know the semiconductor market will recognize the names. It's not easy to make these triangles work to have a product company that agrees to use the technology and goes to the foundry, and the foundry can manufacture what they need. There's a lot of alignment that is required. People, and I talked about it many times, people are always naturally very concerned about being the first ones to use a new technology. They are betting their whole product on that new technology, if it doesn't work the whole product revenues are gone. So obviously, people are concerned. I've been through this many times in my life. I've spent my life in start-ups. And every time we hit that same challenge of just how we cross that chasm. There's a great book whoever hasn't read it about start-ups, which is called Crossing the chasm. And it talks about exactly that you're spending there? How do you cross that? How do you get to the place where you actually start sales and then get things going. And we are now in that process. Crossing that chasm, getting to the point of the first agreements. Next year, there's already going to be the first licensing and agreements, the first license fees and so on. So it's great. And we're participating in quite a few conferences, flash memory some of them were actually at a few conferences and next month, there's going to be an IP conference in France. So lots of marketing material as well. So to summarize and what we're looking at trying to set now the targets until the middle of next year. So with SkyWater, we clearly need to finish the qualification of the module, the wafer that I have here and start actual work with their customers. We're pushing forward very strongly. Other fab partners, now that we're talking to the Tier-1 fabs, we really want to close with at least one of them by the end of this fiscal year, bringing customers on board. We also -- by the way, when I talk about qualification, I didn't explain that, there are different levels of qualification. Right now, we did qualification at what's all the industry, industrial standard. We're being requested by quite a few people to move up to automotive standards. So we are doing that, and we will be announcing that we managed to achieve qualification even automotive standards. In automotive standards, there also we have several levels that we'll be doing the first level and moving on. We're not going to stop qualification. We'll keep moving to the next level. So now in terms of expectations because I know that many people have been asking me about, "oh, so we're going to see Weebit in cars soon. The automotive industry is extremely difficult, extremely heavily regulated human lives depend on these cars. So you need to go through very, very rigorous testing much more than almost any other industry. So we are talking to automotive companies. We are -- there's that discussion going on, but I don't want to set expectations tomorrow, you'll see Weebit in a car, but it's something that we're working on. And continued R&D always scaling down to beyond 22, et cetera. I guess that's it. You guys know the company. We're in a very good industry. We have a great technology. We're making very good progress. We have a great team. So any questions, comments? Also from online, if there is anything coming in.

Yes. Thank you. It makes me so excited this stuff. People ask me, why are you still in this industry? You can retire -- this is great. Yes. Sorry. We currently don't see a limit. So at this point, we haven't reached anything that kind of signals to us, we can't go below a certain geometry. So actually, Professor [ Tonow ], by the way, he's not involved in semiconductors anymore. I keep in touch with him. He's a great guy. I -- someone that I highly respect, but Weebit has gone a long way already from that rise technology and he's less involved. Actually, I even turned to him. I said, can we, let's do some cooperation and stuff. He said, "You know what, I don't have any students that are doing semiconductor." I won't go into specifics, but right now, people are pushing us into the teens. So that order of magnitude, which is already a big step forward, even -- it's even beyond 22 because you're moving to new technologies, and you're going down from the 20s down to the teams we're already moving to new kinds of technologies. There's a lot of work to make it work there, but we're already doing those analyses.

[indiscernible]

Yes. Yes. So first of all, TSMC has that -- what they're offering right now is that 40 nanometers. They are also, I think, very soon will have it at 22 or might be. We know we've seen their data sheets. I'm very confident we'll be very competitive with them to say the least. It's important to note here. And I think, again, many people are saying, "Oh my god, you're trying to compete with the largest fab in the world. I mean you know what's going on here. So a, they're not competitors. When we heard that they were selling ReRAM, champagne, but we're open -- that was like the best news I could ever have. because of several things. First of all, they're a fab. So they're not going to be providing it to any other fabs. And all the other fabs now have to have some people with TSMC. So that's the first thing. The second thing is TSMC is not a competitive. TSMC, what does it mean to be a foundry? A foundary sales wafers, okay? Now in order to sell the wafers, they want to give their customers the largest possible library of elements that can come on those wafers. So you could think of it as a supermarket. They will have there several types of milk, right? So different types of processors, different types of Bluetooth communication whatever. They have their ReRAM on the shelf there. If we -- not -- when we show that we're better and they're just going to put us on the shelf rate next to them. They won't really care. They want to sell wafers, okay? So people should understand, we're not competing with TSMC, not at all. On the contrary, for me, there are potential customers that eventually will get.

Can you use the microphone because people are in line for questions.

[indiscernible] I'm also asking for [ Peter Kuper ] that has been in touch with you a bit to say. But the question is around the potential competitive turn technical. So the [ NEU ], I think, high ran works in the analog rather than the digital space. Could you give us a bit of background as to what -- how that might intersect?

So that is sitting here. And Intel's Founder, I guess, the same statement is only the paranoid survive, okay? We have to be paranoid. -- that's a great job at it. And he learns from him. And so we're always paranoid. And I'm always looking around and I'm always -- I'm assuming not only -- I'm assuming that there is going to be a new company that somehow pops out of nowhere and will have a good ReRAM technology. And that's one of the reasons why I'm really pushing to just move as fast as we can, get into market, get that market share so that as soon as you become the incumbent, it's much easier, right? So we're pushing there. TSMC has their ReRAM, and that's great. They're pushing that technology as well. And they showed the world. ReRAM is here. ReRAM is already used. There's a ReRAM chip in the iPhone 14. It's legit to use ReRAM. So that's good news. There are other -- different companies have some ReRAM and they are using it in different ways. I haven't seen, at this point, anyone who's pushing their ReRAM to the market is actually trying to do mass sales of ReRAM. There aren't many, by the way, I mentioned the other 3 guys are kind of not around. One of them is 4 DS, and I don't want to go into too much detail there. You guys have -- many of you guys have been following them as well and seen. I'm always assuming that at a certain point, they will manage to breakthrough and they will be back. okay? For me, that's my basic assumption. The same goes for all kinds of other players. But right now, if I try to be as honest as I can -- it's really -- Weebit is really the one player that is standing out in the market.

Yes, Coby, just with all of the traction, I suppose, in Tier-1 and Tier-2 parts. Are you able -- or do you see an ability to be able to simultaneously take out the product?

Very good question, and it is a lot of work. Each one of these foundries. It is a lot of work. Obviously, every company has capacity issues, and we do too. And I use that with them. I basically tell them, whoever moves first and engages with us. We'll be working with them. The others might be left out second step, it's just that's how much we can do in parallel, right?

So Yes. Coby, [indiscernible] just wanted to ask, given we've come a long way. And now it's just Weebit and TSMC, obvious Weebit become far more valuable in the eyes of all these other non-heavy ReRAM foundries. Has there been any thought given to maybe attracting a white investor to protect the company -- and to -- so it can't be bought out and all shareholders don't gain the full advantage of the all great work and the boards in the company's great work.

We're talking -- you know that in the last trade we brought in Israeli institution. And actually, that's attracted more interest, and we are talking to institutions there and I guess, I hope to have more of them come closer to Weebit. I am investing some time with trying to get U.S investors also interested -- the problem with the U.S. guys is, oh, Australia way out there, and it's not our working hours, et cetera, et cetera. So it's not easy. I believe that as we stand out, as we're progressing, as we're the state that Weebit is, we'll start attracting the attention of bigger investment, but that's an ongoing work.

Thanks, Coby. Once again, great presentation. I was just wondering, as the company continues to grow and we get towards commercialization, -- the team will obviously also continue to grow. Do you see any constraints there with hiring new personnel and ensuring that the team remains as high quality as it is at the moment.

So we have an amazing team. And I think one of the key things for me has been to hire only the top-notch people, really the best people that we can find. Now it's very hard to find that panel. I'm very proud to say that we've managed to hire that talent. By the way, quite a few of them we managed to hire -- they received much higher offers from other companies, and I'm really glad that Weebit has already the reputation of being a fun place to be at and an amazing team that these guys can come to and learn from their peers. So people have accepted offers from Weebit even though they weren't the highest salaries, et cetera. It is a challenge. We still need to hire a few more people. The market is a little bit better now. I mean with the current market situation, many of the big companies have been laying off. In Israel, the tech sector still need so many more people that anyone that's laid off within a week or two already have a job. But yes, we're working on it. Those few -- we have 2, 3 positions right now that I really want to fill. And we're not going to compromise. I mean the one thing is, I want the top talent and we will get the top talent and continue to work there.

You were talking about the iPhone 14 and the ReRAM and that, how important is this power assumption in a mobile fund because the screen take that consumes most of the power. Is it -- and have you evaluated the iPhone 14 and seeing how it performs?

So first of all how important is power in cell phones, I think anyone here in the room will tell you how mad they get when the cell phone runs out of power before night time. So anything that can help extend that -- and another thing, Dadi has more experience than any of us here in that. The moment that you give people and you added function, if it's a faster processor, if it's a lower power memory, that will be used by someone. But we don't know the details, which chip exactly in iPhone 14 is. The indications that I get are that it is in the power management of the iPhone 14, where they're using the ReRAM right now.

But what's the relative importance of power consumption in a chip compared with the screen?

I don't think I can answer that. I don't know if, Dadi? I don't know what to say.

It's difficult to say. The screen could be something of between 30% to 50% -- but, the screen is always walking, but person and communication works even when the screen off. So power consumption is not just a screen. Screen is very important, but everything is important. One of the biggest problem is what you call power management, what the power management is that you want to turn off any activity when it's not operating. By the way, the best engineer [indiscernible] that's the way power in the house. When we slip, we take much more power than when we're running off them or doing a sprint. People are trying to imitate that using any device that we use. So power is very important because when the screen is off and it's still communicating, connecting data, storing it in memory, doing a lot of stuff, it's very important. So people will work on any milliwatt that they could save on this one. It's also the size is important. Want to take as much they can do it. Battery life is also important, but also warming up. You don't want to all this one in your hand and get a burn. So it's not just the overall, battery utilization is also how much it is being developed when there's an operation. And you cannot have a fan in a phone.

How is your physical and mental health going, both of you, Dadi and...

Unfortunately, I don't get to do enough sport as I want to. I mean that's one thing that Weebit, I end up waking early in the morning because I need to see what's happening in Australia and the whole day. So that's one thing that I really wish, I had more time to some sports.

That's fantastic. Following up about the gentlemen's question up there with employment and retention of employees. How do you see yourself and Weebit when we hit that stage of discrete and in long term, like 5 years down the line, do you still see being in Weebit? When we hit the IoT -- when we are in -- or is that discrete market and as well as the AI market that further along, do you still see yourself in Weebit?

I think what drives me more than anything is, a, just the excitement of holding that wafer, seeing that wafer that achievement being in a smaller company that's growing, you have constant challenges and that thrill of achieving things that people are telling you are impossible or making that next milestone, that's what drives me. So I wake up in the morning and I get full of energy. And I have to say, this room drives you, okay? Looking at all of you guys and knowing how you guys are supporting us, and you guys have been with us also in the down tiers. A lot of you guys, I know for many years already. right? And you've been there and you're supporting us. And I mean what I'm getting back from you guys is feeding me. So at this point, I'm just focused on doing the work. I don't have any thoughts about leaving Weebit at all, I mean, on the contrary. By the way, many of you might not know, I'm actually -- Dadi asked me, we're in the top 20 shareholders of Weebit, okay, I put a lot of my personal money in Weebit because I honestly believe in this company, and I really want to see it succeed. So...

[indiscernible] Johnson. Coby, can you tell us the time go from signing your first customer agreement, putting aside NRE revenues, how long should you get to licensing revenue from a customer agreement. And does that time scale change at the 10th customer and the 50th customer compared to the first customer?

So it's actually -- I'm glad that you raised it because I didn't talk about the business model, and I know that many people get confused. So let me go step by step through. We have a triangle. We have the foundry, we have the product company. Both of them need to license the technology from Weebit, okay? The foundry needs to get a license to manufacture. The product company needs to get a license to design, okay? So that first step is when they engage, they need a certain license fee. Now it's true with the first customers are always a little bit different. Some of them will put some conditions on that payment and things like that. So I'll talk about the general case. The general case is you sign an agreement, you get paid license fee. Now with many of the customers, especially in the beginning, there Dadi calls it high-touch customers. You need to really work with them. They will come to us and say, in our design, we want to modify the module a little bit. We need it a little bigger. We need a different type of interface. We this and that. So they will want us to do some engineering work to adopt the module to their needs. And they will need to pay us what's called NRE, nonrecurring engineering for that work. And that's being paid through the project as we hit milestones and et cetera, et cetera. By the way, in the beginning, you do a lot of that manually. As we move forward, our team -- our VP R&D has a lot of experience in building memory compilers so that it's going to automate a lot of that work moving forward. It's not going to be like, " oh, you have 1,000 customers. So now you need for 1,000 customers to manually adopt that module. " It's going to be much, much, much more automated as we move forward, but they'll still have to pay us that NRE fee. It doesn't matter if it's manual or automatic, they'll need to pay us. Then the next step, which is maybe the most important one, is getting royalties on the sales of those products. Now there are 2 ways that this can happen. Some customers, and especially as we move forward and we have different versions of modules sitting on the shelf at the foundries, customers will just -- just like they go and they say we want that processor, that Bluetooth they'll say we want the Weebit module X, that one. And they will not be in direct interaction with us even they will just be working with the foundry. The foundry uplifts the cost of a wafer for those customers, and then the foundry will be passing on to us the royalty. If we're working with the bigger guys, when we work with them, normally we'll be engaged directly. And so in that case, the royalty will come directly from them as a percentage of the chips that the -- the chip revenues that they have. So at the end, no matter how you look at it, we get royalty, okay? The process is they need to decide that they want to use our ReRam. They need to decide that before they start working on their product. And then they design it into the product, just they built the whole product and part of one component is our memory. The design process, it really depends on the application. It really depends on a lot of things, geometries, et cetera, et cetera. Orders of magnitude are the very simplest designs might be 6 or 8 months, more complex or a year, some get or 18 months to design before they actually go, they manufacture, they need, by the way, every new device, every new chip needs to be qualified because that chip is different and they still need to show that it's ready for mass production. So they go also through the qualification. At the end of that process, that's when they start mass producing that's when we get the royalty. So there is a delay until we get the royalty. But when you get it, it's a state stream as we sell that product.

I was wondering if you could please speak to semi back to -- sort of trade war going on and whether that will restrict the company's prospects in the future depending on what decisions you take.

Again, another very important question in this time and age. You know that back in 2019, we had much more of a focus on China. We even have a few announcements on work with China. We were starting to sense that it's starting to be more risky. Part of the key job -- a key part of the job of the CEO or Chairman is -- or the Board is risk manager. And it became clear to us that continuing the work with China is high risk. Now the Western world, there's huge potentials in the Western world. I mean, it's not like we're going to run out of potential in the Western world anytime soon. And the big Tier-1 fabs, maybe a couple of them are in China, but the others are in the Western world. So there's a lot of work to be done there. Right now, it's not limiting us at all the fact that you can sense that we kind of chose side with the Western world. It's not that we disengaged from China. We still have communication with Chinese foundries, with Chinese customers. But to be honest, it's kind of on-hold very, very little communication. Our focus right now is SkyWater and the Tier-1 fabs that are Western and there are a lot of big guys there. There is a risk, by the way, talking about TSMC. Everyone's talking about the risk of China invading Taiwan, et cetera, when it will happen, one of the biggest risks there and one of the reasons why everyone is talking about it is 2 of the top 5 foundries are in Taiwan. There's TSMC, which is the huge one. There's UMC. If something happens, it's a big risk to what's going to happen with them. I mean the world is basically going to come to a standstill because they manufacture more than 50% of any semiconductor that you guys have, the cell phone or whatever. So -- and by the way, so that's causing many people to reconsider if they want to work just with TSMC or maybe have a second source of one of the other companies. So in that sense, it's kind of even giving us a boost that we are talking to the other foundries.

There's another question here, but just in a multi task because the AGM still hasn't formally closed, our box is going to be passed along. If you've got a green voting card, if you could fill it out and put it into the ballot box. But otherwise, we'll just continue with questions, when we do that.

Okay. We said that the presentation might be at the end of the AGM, but nevermind.

[indiscernible] Matthew. Question -- my question is around the 22 nanometer. That's something that's really come on this year pretty quickly. So a couple of parts of the question. So you have indicated that the takeout will be by the end of the year, if you can just confirm that. And then the second part of the question is it seems to be industry led as opposed to us pushing it. If you could talk to me there. But the key part of the question really is the significant. So I'd love you to talk to the significance of that to the nonvolatile memory market -- and then obviously to Weebit with that sort of quality of partnership that we'll be linking in West.

So 22-nanometer is already a very advanced node. I mentioned that there are less than 10 foundries in the world that know how to manufacture -- 22. So that's, of course a very important milestone for us. I currently cannot talk about which foundry and what exactly is going on there. But again, it's -- you're talking about something that's very advanced. And the mere fact that we'll be taking out there is catching attention. It's catching attention of many people. Okay. We didn't check on questions online, by the way, because you're multitasking as well with -- I just realized that, check online and then we'll need to see at a certain point, we need to, are there questions on the phone?

There are no questions on the phone at this time.

Okay. Eric is checking online. No questions online. Okay. Yes. Actually, good point, our marketing team needs to work on it. Yes, you have the wafer I mentioned at the end of -- once we close the AGM, I have a wafer -- we have also a chip here. I haven't showed it anyone yet, but it's here to show you guys. And just -- so I won't forget, we have some giveaways back there. Yes. Let's -- I think we're ready to finalize. So I think let's see disclaimer, sorry -- disclaimer, you guys know the disclaimer. Okay, you guys already voted and given your ballot. And okay, we have questions. So I think we can formally close the AGM. Thanks, everyone for coming. Actually, you know what, in the spirit of these days. Can I take a selfie with everyone in the background? That will be a nice picture to put on the website. So just a second, let's do something like this. Okay. Thanks.